Good year for copper producers, says BHP

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    Good year for copper producers, says BHP

    June 29, 2009

    Article from: The Australian

    BHP Billiton Ltd's base metals head Diego Hernandez expects it to be a "good year" for copper producers after a better-than-expected first half.

    "It has been a good half-year for the copper price," Hernandez said at a seminar in Santiago.

    "For the industry, the price we have had this year until now has been much better than expected. Probably, it will be a good year for the copper industry (even if copper falls next quarter)," he said.

    Copper has surged 64 per cent this year, after falling in 2008 for the first time in seven years.

    A low availability of copper scraps combined with global manufactures' purchases to replenish stockpiles helped drive the price higher this year, Hernandez said.

    Copper futures for September delivery fell 0.7 cent, or 0.3 per cent, to $US2.309 a pound on the Comex division of the New York Mercantile Exchange.

    China, the world's biggest buyer of the metal used in pipes and wires, will need to build homes for 350 million people expected to move to cities until 2025, said Helena Robin Bordie, a BHP economist based in Shanghai.

    China will need 50,000 skyscrapers, equal to 10 New York cities, over the next 15 years to accommodate urban migrants, she said yesterday, at the seminar.

    Electricity distributors will have to build more ultra-high voltage cables to carry power from coal generators in western China to industrial centres as power generation in the eastern part of the country falls, Ms Bordie predicted.

    Total Chilean exports to China, its biggest market, declined 39 per cent in the first quarter, according to data from the central bank. Chinese purchases of unrefined copper from Chile fell 78 per cent from a year earlier, while refined copper shipments dropped 33 percent.

    Lower prices for Chilean products, led by copper, may cause South America's fifth-largest economy to shrink this year for the fourth time in half a century.

    BHP owns 57.5 per cent of Chile's Escondida, the world's biggest copper mine.


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